Bernie Madoff vs. Social Security

Here is a good comparison between what Bernie Madoff did and our Congressional Representatives today. Where is the outrage?

Why did Bernie Madoff go to prison? To make it simple, he talked people into investing with him. Trouble was, he didn't invest their money. As time rolled on he simply took the money from the new investors to pay off the old investors. Finally there were too many old investors and not enough money from new investors coming in to keep the payments going.

Next thing you know Madoff is one of the most hated men in America and he is off to jail.

Some of you know this… but not enough of you. Madoff did to his investors what the government has been doing to us for over 60 years with Social Security. There is no meaningful difference between the two schemes… except that one was operated by a private individual who is now in jail, and the other is operated by politicians who enjoy perks, privileges and status in spite of their actions.

Do you need a side-by-side comparison here? Well here's a nifty comparison.

BERNIE MADOFF
Takes money from investors with the promise that the money will be invested and made available to them later.

SOCIAL SECURITY
Takes money from wage earners with the promise that the money will be invested in a "Trust Fund" and made available later.

BERNIE MADOFF
Instead of investing the money Madoff spends it on nice homes in the Hamptons and yachts.

SOCIAL SECURITY
Instead of depositing money in a Trust Fund the politicians use it for general spending and vote buying.

BERNIE MADOFF
When the time comes to pay the investors back Madoff simply uses some of the new funds from newer investors to pay back the older investors.

SOCIAL SECURITY
When benefits for older investors become due the politicians pay them with money taken from younger and newer wage earners to pay the geezers.

BERNIE MADOFF
When Madoff's scheme is discovered all hell breaks loose. New investors won't give him any more cash.

SOCIAL SECURITY
When Social Security runs out of money they simply force the taxpayers to send them some more

Bernie Madoff is in jail. Politicians remain in Washington .

this is unfair to Bernie Madoff. At least he didn't force people into his scheme; and if someone was wise enough to figure out that they were unlikely to get promised returns, they had the option of escaping.

I'm outraged. SS isn't going away so what can we do to fix it?

Oh wait, what am asking a repub for, you and yours had 6 years of majority and did nothing but run up debt and expand government.

Good grief.

:tomato:

cpwill said:

this is unfair to Bernie Madoff. At least he didn't force people into his scheme; and if someone was wise enough to figure out that they were unlikely to get promised returns, they had the option of escaping.

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Exactly right, my bad. Seems liberals have a problem understanding that and ignore personal responsibility in any issue. Look at what happened when Bush tried to reform SS and the outrage on the left due to their potential loss of power?

Entitlements are the sacred cow and now liberals have just created another one.

For those that blame Bush for the deficit and debt, they seem to have no problem with Obama putting Bush spending on steroids and creating a larger govt. which of course means less debt to the American taxpayer, LOL.

"Don't touch MY entitlement program" let's create another one which will be every bit as good as the SS and Medicare entitlement programs.

NoJingoLingo said:

I'm outraged. SS isn't going away so what can we do to fix it?

Oh wait, what am asking a repub for, you and yours had 6 years of majority and did nothing but run up debt and expand government.

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actually Bush tried to fix social security. as i recall, dems had public aneurisms over it and it got killed.

cpwill said:

actually Bush tried to fix social security. as i recall, dems had public aneurisms over it and it got killed.

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By adding trillions to the debt and making retirement infinitely more risky? Nice fix. Probably why his own party didn't even support it.

SS could would work just great if the numbers were kept in line. Benefits reduced, means testing, cap lifted, age raised and make it illegal for government to spend SS revenues on other things. Problem solved.

ooops

unlike madoff's clients, there is no one who has been denied their social security entitlement when it was due

so much for your weak comparison

justabubba said:

ooops
unlike madoff's clients, there is no one who has been denied their social security entitlement when it was due
so much for your weak comparison

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Unlike the government, Madoff couldn't simply use force to collect more taxes to cover the shortfall.

There is a solution, it's called abolish SS over five years. Pay out in staggered lump sums what people hae put in as best as can be afforded, and then kill the entire system.

SS can NEVER EVER EVER work. It hasn't worked, it doesn't work, it's inefficient to the individual, and politicians can't be trusted to not touch the money.

If you were to take the money you put into SS and invest it in a Savings Account and every 5 years put that amount into long term CD's you'd have FAR MORE saved for retirement then if oyu relied on SS.

Everyone knows this, but sadly our Grandparents and great grandparents bought into the notion that Government could somehow do it better. Sigh.

USA-1 said:

By adding trillions to the debt and making retirement infinitely more risky? Nice fix. Probably why his own party didn't even support it.

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No, allowing for 4% of the contribution already being witheld to go into a privatized fund for potential growth. This is contradicted to a 1% rate of return from SS, a return rate so low I am prohibited legally from selling any products in the retirement portion of my practice. Yeah, giving people an option with their money was a bad idea.:roll:

SS could would work just great if the numbers were kept in line. Benefits reduced, means testing, cap lifted, age raised and make it illegal for government to spend SS revenues on other things. Problem solved.

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So, in other words, pay for the whole thing but only get a portion back if you are in a higher tax bracket? What a crock! I would NEVER choose to pay for a service if I had to bear more responsibility for less return, that is bull****. As well, for less benefit you would take the ceiling off of a forced tax on something that will show a diminished means tested return? What a stupid ****ing idea. The trust fund should be established though if SS is to continue and locked in against borrowing for non-related programs, on that I agree......but none of the above would come even close to fixing the problems with the entitlement system.

LaMidRighter said:

No, allowing for 4% of the contribution already being witheld to go into a privatized fund for potential growth. This is contradicted to a 1% rate of return from SS, a return rate so low I am prohibited legally from selling any products in the retirement portion of my practice. Yeah, giving people an option with their money was a bad idea.:roll:

So, in other words, pay for the whole thing but only get a portion back if you are in a higher tax bracket? What a crock! I would NEVER choose to pay for a service if I had to bear more responsibility for less return, that is bull****. As well, for less benefit you would take the ceiling off of a forced tax on something that will show a diminished means tested return? What a stupid ****ing idea. The trust fund should be established though if SS is to continue and locked in against borrowing for non-related programs, on that I agree......but none of the above would come even close to fixing the problems with the entitlement system.

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Seriously, how can anyone with ethics support this nonsensical crap.

All anyone wants is to continue it and slap on quick fixes when it starts to go broke again.

Harry Guerrilla said:

Seriously, how can anyone with ethics support this nonsensical crap.

All anyone wants is to continue it and slap on quick fixes when it starts to go broke again.

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Patching holes instead of actually adressing the problems, it's sickening.

LaMidRighter said:

Patching holes instead of actually adressing the problems, it's sickening.

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It makes me want to leave.

SS was meant to help out people when things were tight during the great depression. I can see how someone could make that argument back in the 30s and 40s (I'm being generous here .) Most didn't live long enough to collect the benefits. It's a system that should have been replaced in the 50s and 60s with something more sustainable.

The_Penguin said:

SS was meant to help out people when things were tight during the great depression. I can see how someone could make that argument back in the 30s and 40s (I'm being generous here .) Most didn't live long enough to collect the benefits. It's a system that should have been replaced in the 50s and 60s with something more sustainable.

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Benefits for elderly people have turned from safety net to more luxurious benefits at the expense of young people.

It definitely needs to be replaced, more importantly removed entirely.

there is an easy fix and i suspect (hope) Obama now has the guts to move in that direction
all that is needed is to eliminate the cap on social security contributions and the system returns to solvency
there is no cap on the income of those who are eligible to draw social security
neither should there be a cap on the contributions to the system that the high earners make

that football player earning $10 million per year pays social security on the first $106,800. the remaining $9,893,200 is not subject to any social security tax. he is taxed on only 1.07% of his salary. in comparison, that person making less than $15,000 per year at minimum wage pays on 100% of their annual income.
the minimum wage employee pays 6.2% of his income. the pro football player - who can better afford it - pays but 0.0662% of his annual earnings
if the football player had to pay at the same rate as the minimum wage employee, the social security coffers would add $613,378 to the trust fund plus another $613,378 as the employer's matching contribution
so, by having this regressive social security obligation, the trust fund loses $1,226,756 on that high earning football players salary - per year

and remember, even tho he is wealthy, that high earner will draw social security out of the trust, in far greater amounts than the minimum wage employee

so, here is my challenge. if you think the minimum wage employee can better afford to pay social security on his full income but a high earner should not, please explain your position

justabubba said:

there is an easy fix and i suspect (hope) Obama now has the guts to move in that direction
all that is needed is to eliminate the cap on social security contributions and the system returns to solvency
there is no cap on the income of those who are eligible to draw social security
neither should there be a cap on the contributions to the system that the high earners make

that football player earning $10 million per year pays social security on the first $106,800. the remaining $9,893,200 is not subject to any social security tax. he is taxed on only 1.07% of his salary. in comparison, that person making less than $15,000 per year at minimum wage pays on 100% of their annual income.
the minimum wage employee pays 6.2% of his income. the pro football player - who can better afford it - pays but 0.0662% of his annual earnings
if the football player had to pay at the same rate as the minimum wage employee, the social security coffers would add $613,378 to the trust fund plus another $613,378 as the employer's matching contribution
so, by having this regressive social security obligation, the trust fund loses $1,226,756 on that high earning football players salary - per year

and remember, even tho he is wealthy, that high earner will draw social security out of the trust, in far greater amounts than the minimum wage employee

so, here is my challenge. if you think the minimum wage employee can better afford to pay social security on his full income but a high earner should not, please explain your position

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The vast majority of people never earn minimum wage their entire life.
Your argument is false on it's face.

Add to the fact that the football player doesn't even need SS in the first place.
Why should he pay anything for it?

Harry Guerrilla said:

Benefits for elderly people have turned from safety net to more luxurious benefits at the expense of young people.

It definitely needs to be replaced, more importantly removed entirely.

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I have no problem with having private accounts where you store your money in order to get it ready for retirement (i.e. replacing the present SS scheme where we save collectively.) But yes, this does worry me. Many of my co-workers are retiring soon and want to.

I'm worried that I simply won't have the means to retire when the time comes, if anything I've pretty much accepted that I won't be able to do that and will have to work until the day that I die. Frankly, this doesn't really bother me. I see nothing unusual about having some people retire sooner than others. It depends on the person, when they want to leave and what plans they have made. Getting to leave your job at 65 so that you can do something other than work is not a right.

LaMidRighter said:

No, allowing for 4% of the contribution already being witheld to go into a privatized fund for potential growth. This is contradicted to a 1% rate of return from SS, a return rate so low I am prohibited legally from selling any products in the retirement portion of my practice. Yeah, giving people an option with their money was a bad idea.:roll:

So, in other words, pay for the whole thing but only get a portion back if you are in a higher tax bracket? What a crock! I would NEVER choose to pay for a service if I had to bear more responsibility for less return, that is bull****. As well, for less benefit you would take the ceiling off of a forced tax on something that will show a diminished means tested return? What a stupid ****ing idea. The trust fund should be established though if SS is to continue and locked in against borrowing for non-related programs, on that I agree......but none of the above would come even close to fixing the problems with the entitlement system.

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Gee, how much of the rest of the taxes you pay in do you get back? SS is a tax like any other. The only difference is you might get some of it back when you need it.

We pay over 6% of our income into the SS tax. Bill Gates pays .0001% of his income into SS tax. Would you rather he pay more or the country go bankrupt?

SS is not an investment. It never was meant to be. It was enacted to make sure people did not live in squalor after working and paying taxes for their entire life.

Do you have parents or grandparents on SS? Would you pay their way if SS wasn't there? Or would you let them suffer?

I would gladly have more of my taxes go toward SS instead of wasting that money on invading countries, nation building, corporate subsidies, or bailing out the rich investment banks and insurance companies.

Ask the Tea party what their solution is to medicare or SS, something a large portion of them are taking advantage of right now.

SS is not going away. So stop whining about it and come up with some real solutions. Mine are real solutions.

Privatizing SS is not a solution.

The_Penguin said:

. Getting to leave your job at 65 so that you can do something other than work is not a right.

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Most companies want you out at 65 or sooner. Better to hire healthy young blood and pay them less.

USA-1 said:

Most companies want you out at 65 or sooner. Better to hire healthy young blood and pay them less.

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:shrug:

I want to be a billionaire and own my own company by the end of this year, but that's not exactly realistic.

Furthermore, you are simply wrong for two reasons:
1 - Experienced personnel tend to be the most sought after even during economic down-turns.
2 - My generation isn't well liked .

-snip-

Do XYers work hard? Absolutely.

Do they work the same way as you, your father or your grandfather did?

Absolutely not.

-snip-

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Generations approach work ethic differently - Baltimore Business Journal:

Social Security was based on a jobs program implemented by Bismark in the nineteenth century: pay older workers to retire so that younger workers can get a job.

When SS was first enacted in this country the average age expectancy was 65. People are living longer today and are reaping benefits far in excess of their contributions. It has been a great boon for middle America.

While, the program does require some modest changes to get it through the next century; President Bush's plan was to have a substantial portion of SS funds invested in the stock market. We all now know what that would've achieved in “solving” SS long term obligation issues. Thanks, but, no thanks.

The program was implemented with a “pay as you go” funding plan: today's workers pay for yesterday's workers benefits. For the past few decades, it has been running a considerable surplus, covering in part the substantial federal deficits. Those debts are now maturing. Trickle down economics and substantial tax cuts of the 80s, 90s and 00s have not panned out and we must now pay more to make up the difference. Thank you, conservatives.

The_Penguin said:

:shrug:

I want to be a billionaire and own my own company by the end of this year, but that's not exactly realistic.

Furthermore, you are simply wrong for two reasons:
1 - Experienced personnel tend to be the most sought after even during economic down-turns.
2 - My generation isn't well liked .


Generations approach work ethic differently - Baltimore Business Journal:

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I work for A multi-billion dollar company and they have had a long standing policy of pushing old people out the door. Senior employees cost a lot more to keep around. They might not like your generation but they like paying them a lot less. Of course in certain situations experience does matter but face it, almost every job out there could be done by a trained monkey.

USA-1 said:

Most companies want you out at 65 or sooner. Better to hire healthy young blood and pay them less.

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If they can do the work for less, why not? Besides, most of those types get early-out retirement offers that can be pretty sweet deals. And furthermore, if it's common knowledge they do this, it's also obvious that these people intentionally stay at the job - even knowing that (?).

The fact is if after 40 years you are not worth your salary, just offer to take less...what's the big deal. Don't people leave stressfull jobs all the time to take liesurely jobs with less pay? Just because they are older they should demand more pay? Senseless.

How can you work for 40 years and have no more marketable experience than a new college graduate? Seems if you don't pay attention for 60 years and just coast, you may you know...fall behind in your marketability. Whose fault is that...the person who DOES keep up and owns a few businesses by 65?